Gaskin offers retirement plan for IFAs

Former Misys IFA chairman Jim Gaskin’s new venture Fin-ancial Advisers Mutual is offering exclusive access to Mirror, an exit strategy for IFAs selling or listing their businesses on retirement.

Mirror, which is run by IFA and investment management group Cru, is a scheme that takes on the servicing of an adviser’s existing client base and pays an ongoing income for life through revenues generated by new initial, trail and renewal commission.

Around a 20 per cent share of all ongoing new initial commission, renewal and trail is available. Premises, staff and IT systems can also be incorporated into the exit plan. Network Alpha 2 Omega will provide FAM members with compliance and support services.

Gaskin says that most IFA firms are undervalued because the majority of the value lies with the principal rather than the firm.

As the IFA retires or sells his or her business, transactional and trail revenues often remain uncollected or unknown.

FAM members get equity share in the mutual based on annual turnover rather than cash investment.

The IFA, while still practising, needs to move its clients on to a wrap-style 1.5 per cent annual management charge covering the client’s entire product portfolio. Remuneration is split 0.5 per cent to Cru for admin while the IFA takes 1 per cent. Once the IFA retires, this ratio switches, with Cru taking 1 per cent and the IFA 0.5 per cent.

Gaskin says: “IFAs build up a business generating int- rinsic value but if they are in a network the capital belongs to the network shareholders and not them.

“If they are directly authorised, it is likely they have insufficient scale to sell their business or seek a listing to achieve the proceeds they deserve for a lifetime’s work. Now IFAs can be provided with the potential to benefit from the capital value in their business by aggregating with others but experience no loss of control.”

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